The social grants scandal unpacked
The contractor responsible for distributing social grants needs to go by April – but there’s no back-up plan in place
FFOR years government dragged its heels. There have been threats, excuses, deadlines, delays, extensions . . . And now there’s almost no time left. On 1 April comes the final cutoff and millions are worried they’ll be unable to feed their families.
It’s a crisis with the potential to bring South Africa to its knees. Recently a stunned parliamentary portfolio committee listened in disbelief as they were told that 17 million of the nation’s most vulnerable – pensioners, war veterans, children and the disabled – could soon be left without a cent.
And this all because minister of social development Bathabile Dlamini has repeatedly ignored an order of the highest court in the land.
Three years ago the Constitutional Court declared unlawful the dodgy contract awarded to Cash Paymaster Services (CPS) to distribute social grants to the tune of R10 billion a month to the millions who need state assistance.
The South African Social Security Agency (Sassa), the government agency in charge of grants which Dlamini oversees, was ordered to award a tender to a new grants payment provider.
Sassa dragged its heels on the issue for months. It then claimed there were no other contractors equipped to do the job so it would take over the payment role itself and do everything in-house.
The court gave the go-ahead for this to happen provided the complex financial infrastructure and equipment were in place by April when CPS’ contract expires.
But three years on it turns out Sassa is nowhere near ready to issue payments to the people who rely on them.
Now what? If the Constitutional Court sticks to its guns and refuses to extend CPS’ contract there’s no other plan to fall back on.
Millions of lives would be affected and South Africa would be plunged into chaos.
“It would make the Fees Must Fall uprising look like a Sunday school picnic,” warns Corruption Watch executive director David Lewis.
So in effect it seems Sassa and the minister are holding the court to ransom and in the process CPS, a contractor with all kinds of corruption allegations against it, will continue to coin it.
But at this point CPS appears to be the only option. “If you ask me to choose between irregular [processes] and the country going up in flames, I choose irregular,” Sassa CEO Thokozani Magwaza told the portfolio committee.
At this late stage there’s no way Sassa can mount the infrastructure to take over the payments, Lewis says.
And there’s no other contractor able to take over at such short notice and perform the role, he adds.
“It’s difficult to believe that this whole emergency wasn’t contrived in order for them (Sassa) to plead that there’s no way of making the payment other than extending the contract the Constitutional Court has already found was awarded irregularly,” Lewis says.
Meanwhile opposition MPs want an-
swers and are baying for the minister’s blood. Dlamini failed to pitch at the portfolio committee hearing. She sent her apologies, saying she was at an ANC meeting.
“She has shown no leadership on a matter that is a national crisis,” IFP MP Liezl van der Merwe says.
A week before the minister had used a similar excuse, causing the hearing to be cancelled, and it later emerged she’d jetted off to Ethiopia on ANC Women’s League business.
MPs were irate that she could be so tardy when the lives of so many people were hanging in the balance.
This is the same minister who was in the news recently after it came to light that in a single year her department blew more than R121 million on travel and subsistence allowances – this while some of the recipients of the social grants she oversees live on R753 a month.
But will this latest debacle be enough to see her head roll?
WHO DOES IT AFFECT?
Almost 17 million people rely on social grants every month, receiving payments of between R350 and R1 500. They include 12 million children, 470 000 foster children, more than three million pensioners and more than a million disabled people as well as war veterans and people in need of full-time care.
Sassa distributed more than R128 billion in grants during the 2015/16 financial year.
Busisiwe Khumalo, a 62-year-old from Estcourt, manages to support 10 family members on the R1 500 pension grant she receives every month. Her children are unemployed so it’s up to her to support them and her grandchildren.
“I’d literally die because no one is working,” the widow says, her voice shaking. “It may be a meagre amount in the eyes of some people but I manage to buy food, pay school fees and if you’re sick you can go to the doctor.”
HOW THE SAGA UNFOLDED
The awarding of the R10-billion contract in 2012 to CPS was steeped in controversy from the outset with allegations of kickbacks, window-dressing and bribery.
Losing bidder AllPay, a subsidiary of Absa, took legal action and the matter eventually went before the highest court in the land. Late in 2013 the Constitutional Court ruled that the tender was “unlawful”, “irregular” and “procedurally unfair”.
Sassa was instructed to restart the tender process and award the contract to someone else. While this process was under way CPS was permitted to continue handling payments. But by 2015 the new tender still hadn’t been awarded and Sassa was granted a seven-month extension to get its act together.
Later that year Sassa made a submission to the court explaining it was introducing software and hardware to handle the payment of grants in-house. For the agency to be ready, it needed to secure the backing of an accredited banking institution, issue new grant cards, take biometrics and possibly hire more staff. The court agreed on condition that it would ready by 1 April this year.
Meanwhile throughout CPS’ contract there have been allegations of irregularities. Many grant recipients have complained of illegal deductions for things such as airtime when they don’t even have cellphones and electricity when they live in shacks with no power supply.
WHAT NEXT?
Sassa is expected to ask the Constitutional Court for an extension of CPS’ contract by another year. At the time of going to print Magwaza said Sassa was still going to finalise its options. But rumour had it Dlamini was facing an open revolt in her department after she tried to table a plan which would see CPS’ role extended until 2019.
MINISTER OF CONTROVERSY
This isn’t the first time Dlamini has been in the news for all the wrong reasons. She’s become known as the Oyster Box Minister because she loves staying at the luxury Oyster Box hotel in Umhlanga, KwaZulu-Natal, reportedly shelling out R11 000 a night at taxpayers’ expense.
Last year it also emerged her department spent R500 000 to send a fiveperson delegation led by the minister to a five-day conference in Chicago in the US.
‘It may be a meagre amount in the eyes of some people but I manage’